Thursday, January 06, 2011

Technical Picture - Markets Mixed Ahead of Jobs Data

Marginally disappointing initial claims figures gave the bears the edge in pre-market. A 62% retracement of the early slide was ambushed and the S&P emini futures extended a full measured move in 30 minutes of fast selling. After the midday chop, no follow through occurred as participants were cautious ahead of tomorrow's jobs data.

On the 60 minute chart of the SPY we see a double topping pattern taking shape. If the pattern breaks down, we could see some fast selling. On the daily (not depicted) we have two red hanging men, which, if confirmed, could be very bearish short-term.

$USD strength continued for the third consecutive session as price broke out of a month long bullish flag pattern. Energy, precious metals and commodities (excluding Ags) saw some profit taking.

Watching KOL closely for a possible bearish island reversal.

Not many good stocks to day trade today on my radar. Took a long entry in VRX as price pulled back into the BB and found support from the rising 5 period EMA on the 15 min. timeframe. Price/volume contracted (NR7) ahead of expansion, but the expansion was somewhat slow.